TaxTMI 
TaxTMI 
2022 (5) TMI 116
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....ch were heard together. The statement is accepted. We are, thus, dealing with the facts and submissions made by the parties in ITA No.19/2013. 3) It is the case of the appellant that on 17th March 2006 the search action in case of Peety Group of Jalna was conducted by the Income Tax Department. The respondent-assessee is one of the family member of the said group. It is the case of the appellant that during the search action, certain statements of the share brokers were recorded by the investigation wing of the department at Mumbai wherein they had admitted that they had issued bogus 'broker notes' and bills to the number of persons to ante-date purchases including the members of Petty Group of Jalna to generate bogus Long term Capital Gain and Short Term Capital Loss. It is the case of the appellant that the respondent-assessee voluntarily declared the amount shown as long term capital gain and short term capital loss as bogus and had voluntarily stated that they will pay the taxes on the admitted amount on 17th March 2006. However, while filing the return, they retracted from the statement made under section 132 (4) of the IT Act. On 31st December 2007 the Assessing Officer he....
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....ic money. He submits that if in the case of assessee, the disputed issues arise in more than one assessment year, appeals can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3 of the said Circular No. 3/2018. 8) It is submitted by the respondent-assessee that in para 7 of the Circular No. 3/2018 it is further clarified that in a case where appeal before a Tribunal or a Court is not filed only on account of the tax effect being less than the monetary limit specified in the said circular, the Pr. Commissioner of Income Tax shall specifically record that 'even though the decision is not acceptable appeal is not being filed only on the consideration that the tax effect is less than the monetary limit specified in the said circular. Further, in such cases, there will be no presumption that the Income Tax Department has acquiesced in the decision on the disputed issues. 9) The learned counsel for respondent-assessee invited our attention to Clause 10 and 11 of the Circular No.3/2018 and would submit that the said circular provides for an exception in which the Income Tax Depa....
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....n to decide as to whether to file an appeal or not. 12) The learned counsel for respondent-assessee invited our attention to the Office Memorandum dated 16th September 2019 issued by CBDT, clarifying that the monetary limits fixed for filing appeals before ITAT, High Court and Supreme Court shall not apply in case assessees claiming bogus long term capital gain/short term capital loss through penny stocks and appeals/SLPs in such cases shall be filed on merits and monetary limits fixed for filing such appeals before ITAT, High Courts and Supreme Court shall not apply in such cases. He submits that the said circular No. 23/2019 dated 6th September 2019 and the said office memorandum dated 16th September 2019 would not apply to the pending appeals before ITAT/High Courts and SLPs/appeals before Supreme Court. 13) The learned counsel for respondent-assessee submits that even otherwise such memorandum issued on 16th September 2019 could not have been issued so as to take away the effect of the earlier Circulars or could not have been issued contrary to the earlier circulars prescribing the monetary limits. 14) The learned counsel for responent-assessee placed reliance on the j....
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....nd would submit that the appellant revenue had noticed organised tax evasion through bogus long term capital gain or short term capital loss on penny stocks. In view of the Circular No. 23/2019 dated 6th September 2019 and Office Memorandum dated 16th September 2016, the appellant revenue is entitled to pursue the pending appeals before this Court in view of the exception carved out by the said circular No. 23/2019 and clarified by the Officer Memorandum dated 16th September 2019. The learned counsel for the appellant-revenue states that the said Circular No. 23/2019 and the said Office Memorandum dated 16th September 2019 would apply with retrospective effect. 18) The learned counsel for appellant-revenue invited our attention to the judgment of the Gujarat High Court in the case of Principal Commissioner of Income-tax, (Central), Ahmedabad Vs. Anand Natwarlal Sharda (2021) 128 taxmann.com 376 (Gujarat) and would submit that the Gujarat High Court in the said judgment did not accept the contention raised by the revenue that the said Circular No. 23/2019 dated 6th September 2019 and Office Memorandum dated 16th September 2019 were applicable with retrospective effect. 19) The....
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....f every assessee. If in the case of an assessee, the disputed issues arise in more than one assessment year, appeal can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In other words, henceforth, appeals can be filed only with reference to the tax effect in the relevant assessment year. However, in case of a composite order of any High Court or appellate authority, which involves more than one assessment year and common issues in more than one assessment year, appeals shall be filed in respect of all such assessment years even if the tax effect is less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which tax effect exceeds the monetary limits prescribed. In case where a composite order/judgment involves more than one assessee, each assessee shall be dealt with separately. 7. In a case where appeal before a Tribunal or a Court is not filed only on acco....
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....^th August 2019 are extracted as under :- "Reference is invited to the Circular No. 3 of 2018 dated 11.07.2018 (one Circular) of Central Board of Direct Taxes (the Board) and its amendment dated 20th August, 2018 vide which monetary limits of filing of income tax appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court have been specified. Representation has also been received that an anomaly in the said circular at para 5 may be removed. 2. As a step towards further management of litigation, it has been decided by the Board that monetary limits for filing of appeals in income-tax cases be enhanced further through amendment in Para 3 of the Circular mentioned above and accordingly, the table for monetary limits specified in Para 3 of the Circular shall read as follows : S. No. Appeals/SLPs in Income-tax matters Monetary Limit (Rs.) 1. Before Appellate Tribunal 50,00,000 2. Before High Court 1,00,00,000 3. Before Supreme Court 2,00,00,000 3. Further with a view to provide parity in filing of appeals in scenarios where separate order is passed by higher appellate au....
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....n view of the prescribed monetary limits. 3. In this context, Board has decided that notwithstanding anything contained in any circular issued U/s. 268A specifying monetary limits for filing of departmental appeals before Income Tax Appellate Tribunal (ITAT), High Courts and SLPs/appeals before Supreme Court, appeals may be filed on merits as an exception to said circular, where Board, by way of special order direct filing of appeal on merits in cases involved in organised tax evasion activity." 24) Office Memorandum dated 16th September 2019 is extracted as under :- "The undersigned is directed to refer to Circular No. 23 of 2019 dated 6 th September, 2019 and to say that by virtue of powers of the Central Board of Direct Taxes under Section 268A of Income-tax Act, 1961, the monetary limits fixed for filing appeals before ITAT/HC and SLPs/appeals before Supreme Court shall not apply in case of assessees claiming bogus LTCG/STCL through penny stocks and appeals/SLPs in such cases shall be filed on merits." 25) Section 268A of the IT Act, 1961 reads thus :- Filing of appeal or application for reference by income-tax authority.- 268A. (1) The....
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....pn. (2009) 178 Taxman 255 (Bombay) has held that the instructions cannot be interpreted as a statute though it is pursuant to the power conferred under section 268A of the IT Act. What the Court has to consider is the plain language of the paragraph and the object behind the said provisions. The object appears to be not to burden Courts and Tribunals in respect of the matters where the tax effect is less than the limit prescribed. Even before issuing the Circular No. 5/2008 dated 15th May 2008 which was under consideration of this Court, the CBDT had been issuing instructions whereby the monetary limit had been fixed. It is held by this Court that the duty is cast upon Assessing Officer that even if disputed questions arise for more than one assessment year, then an appeal should be filed only in respect of that year where the monetary limit as specified in para 3 of the said circular would have exceeded. 28) A perusal of the Circular No. 3/2018 indicate that by the said circular, in supersession of the CBDT's Circular No. 21/2015 dated 10.12.2015, the CBDT decided that the departmental appeals may be filed on merits before ITAT and High Courts and special leave petitions/appeal....
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.... dated 6th September 2019, the CBDT noticed that several references had been received by the Board in large number of cases where organised tax evasion came through bogus long term capital gain and short term capital loss on penny stocks and the department was unable to pursue the cases in higher judicial fora on account of enhanced monetary limits. The Board further noticed that in large number of cases ITATs and High Court have recognized the unique modus operandi involved in such scam and had passed judgments in favour of the revenue. However, in cases where some appellate fora had not given due consideration to position of law or facts investigated by the department, there was no remedy available with the department for filing further appeal in view of the prescribed monetary limits. 33) The CBDT accordingly clarified that notwithstanding anything contained in Circular issued under section 268A specifying monetary limits for filing of departmental appeals before ITAT and High Courts and SLPs/appeals before Supreme Court, appeals may be filed on merits as an exception to the said Circular where the Board, by way of special order direct filing of appeal on merit in cases invol....
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....No. 3/2018 dated 11th July 2018 and more particularly, para No. 13 thereof, specifically prescribing that the said Circular would apply to the SLPs/appeals/cross objections/references to be filed from the date of the said Circular in Supreme Court/High Courts/Tribunals and it shall also apply retrospectively to pending SLPs/appeals/cross objections/ references. The Income Tax Department was directed to withdraw/not press the pending appeals below the specified tax limits set out in para 3 of the said Circular. However, no such specific direction was given in the said Circular No. 23/2019 dated 6th September 2019, thereby to apply the said conditions set out therein to pending SLPs/appeals/cross objections/references before the Supreme Court/High Courts/Tribunal involving organized tax evasion activity. In our view, the said Circular No. 3/2018 dated 11th July 2018 cannot be read with the Circular No. 23/2019 dated 6th September 2019 read with Office Memorandum dated 16th September 2019. The legislative intent is thus clear that the said Circular dated 6th September 2019 would not apply with retrospective effect. 38) Chhattisgarh High Court in the case of Deputy Commissioner of I....
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.... preferred after the date of the Circular dated 23/2019 dated 6th September 2019 involved in organized tax evasion activity can be filed on merits before the ITAT/High Courts/ Supreme Court including the cross objections only if the CBDT passes a special order in those SLPs/appeals/cross objections before the Supreme Court/High Courts/Tribunals if the tax limit is less than the specified monetary reliefs prescribed in the Circulars issued by the CBDT under section 268A of the IT Act, 1961. 41) These circulars under section 268A of the IT Act 1961 by the CBDT are issued with an object to not to burden the Courts and Tribunals in respect of the matters where the tax effect is less than the limit prescribed, subject to the exceptions carved out in these Circulars. 42) It is not in dispute that the appeals filed by the appellant-revenue in this bunch of appeals allege the voluntary declaration of the amounts shown as long term capital gain and short term capital loss by the respondents-assessees during the search action under section 132 (4) of the IT Act, 1961. However, in view of the fact that the said Circular No. 23/2019 dated 6th September 2019 read with Office Memorandum da....